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    Coefficient of varitaion

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    Five investments alternatives have the following returns and standard deviations of return.

    Alternative Returns-Expected Value Standard Deviation

    A $5,000 $1,200
    B 4,000 600
    C 4,000 800
    D 8,000 3,200
    E 10,000 900

    Using the coefficient of variation, rank the five alternatives from lowest to highest risk.

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    Solution Preview

    Coefficient of variation= Standard deviation/Expected value
    Lower coefficient of variation indicates lower risk

    Hence coefficient of variation is as follows:
    A= ...

    Solution Summary

    This provides the steps to calculate the Coefficient of varitaion